Overview
Extreme weather conditions and consumer behaviour pattern changes, such as the shift towards electric vehicles, are increasing the number of challenges confronting utilities. These factors, coupled with existing aging infrastructure, leave legacy one-way grids unprepared and ill-equipped to manage the demands of the modern world.
Smart grids provide reliable and sustainable services to utilities by providing a digital network made up of multi-directional communications, control systems and edge-computing processing that can reduce the frequency and duration of power outages, reduce storm impacts, and restore service faster when outages occur. The global smart grid technology market is expected to triple in size from 2017 to 2023 to reach US$61 billion. As global investments in renewable energy capacity increased from $32 billion in 2004 to $282.2 billion in 2019, smart grid companies will likely present an exciting opportunity for investors.
Tantalus Systems (TSX:GRID) is a smart grid solutions provider focused on transforming aging one-way grids into future-proofed multi-directional smart grids. The company’s goal is to improve the efficiency, reliability and sustainability of public power and electric cooperative utilities and the communities they serve in North America and the Caribbean Basin. Tantalus is led by a highly experienced management team with decades of experience in the energy and capital markets.
In 2013, Tantalus was the first company in their market to deliver a Linux-based edge computing platform in the utility industry. The company’s market-leading edge computing platform and its unique technical abilities set Tantalus far ahead of the competition –– many of which are only now starting to implement edge computing.
Tantalus offers a purpose-driven and cyber secure market-leading edge computing platform, robust software applications and an advanced IoT communications network. The company also aggregates and leverages 30 billion data points from its user community and utilities to provide in-depth data analytics to customers. These analytics allow utilities to efficiently and effectively manage service quality and infrastructure to save money, reduce greenhouse gas emissions, improve efficiency and avoid unwanted major events such as fires.
The company also boasts a highly impressive 99 percent customer retention rate over 30 years. As a result, Tantalus has established deep relationships with customers that typically last for 15 or more. The company also had a compounded annual customer base growth rate of 20 percent from 2013 to 2020. In the first two quarters of 2021 alone, the company added 11 new utilities to its user community for a customer base of over 200 utilities.
In August 2021, Tantalus announced strong financial results for the second quarter of 2021. The company reported a 7 percent revenue growth year-over-year for the first six months of the year from US$15 million to US$16 million. The company also reported its 18th consecutive quarter, or more than four years of delivering positive adjusted EBITDA.
Tantalus completed a C$9.9 million financing in conjunction with going public in February, 2021 and recently completed a C$10.6 million overnight-marketed financing which substantially strengthened its balance sheet. As a result of this financing, the company has a strong cash position on August 12, 2021 of approximately US$16 million.
The company also prides itself on its positive organizational culture that fosters a rewarding environment for employees to engage and contribute in the company’s key initiatives. The company’s culture breeds autonomy and accountability for all employees, including the top executives. Tantalus has 120 to 125 employees who are passionate and proud of the achievements and goals that the company has.
Going forward, Tantalus plans to continue scaling their user community of utilities, monetizing the data that is captured by their solution and expanding the applications that they deliver through investment in R&D. The company also plans to expand to new geographic regions and seek strategic partnerships and M&A opportunities.
Tantalus Systems’ Company Highlights
- Tantalus Systems is a smart grid solutions provider focused on transforming aging one-way grids into future-proofed multi-directional smart grids for public power and electric cooperative utilities in North America and the Caribbean Basin.
- Tantalus offers a purpose-driven and cyber secure market-leading edge computing platform, robust software applications, an advanced IoT communications network and deep data analytics.
- In 2013, Tantalus was the first company in their market to deliver a Linux-based edge computing platform in the utility industry.
- The company also boasts a highly impressive 99 percent customer retention rate over 30 years and a compounded annual customer base growth rate of 20 percent from 2013 to 2020.
- The company has a strong cash position, strong year-over-year revenue growth and more than four consecutive years of positive EBITDA.
- Tantalus is led by a highly experienced management team with decades of experience in the energy and capital markets.
Tantalus Systems’ Key Markets
Tantalus provides various smart grid solutions to customers, including advanced metering infrastructure, distribution automation, ERT meter migration, fiber-to-the-home, load management, power line communications, TUNet grid reliability analytics and insight and electric, water and gas AMR.
The company’s in-depth analytics based on data points allow utilities to efficiently and effectively manage service quality and infrastructure, automate billing, identify power outages and analyze constant power quality data to identify inefficiencies or vulnerabilities in their grid. Ultimately, this data can help utilities save money, reduce greenhouse gas emissions, improve efficiency and avoid unwanted events such as fires.
Tantalus recently announced the addition of its 200th utility joining the company’s growing user community of public power and electric cooperative utilities in Canada, the US and the Caribbean Basin. Tantalus is trusted by a variety of utilities, such as EPB Chattanooga, Entegrus and the US Virgin Islands Water and Power.
Tantalus Systems’ Management Team
Peter Londa – Director, President and Chief Executive Officer
Peter Londa is a seasoned smart grid technology executive with over 20 years of experience in leadership roles. Londa joined Tantalus as president & chief executive officer in 2014 and he is also a director of Tantalus. Before joining Tantalus, Londa served as the independent chair of the board of directors for World Energy Solutions Inc. (NASDAQ:XWES) and as the chair of the Merger and Acquisition Committee. Londa was actively involved in leading World Energy’s sale to EnerNOC (NASDAQ:ENOC).
Previously, Londa served as the chief executive officer of BPL Global Ltd. BPL Global is a leading smart grid company delivering technology solutions to the electric utility industry with operations in the United States, Europe, Middle East, India and China. At BPL Global, Londa was responsible for directing and managing all aspects of corporate strategy, operations, engineering, corporate development and financing. Londa was also instrumental in executing the sale of BPL Global to a division of the Danaher Corporation (NYSE:DHR). Additionally, he has held various leadership positions in the technology and investment banking industries at companies, including The Chart Group L.P., Thoughtworks, Inc. and SG Cowen. Londa is a graduate of Emory University and holds a JD, MBA in Finance and Corporate Law and a B.A. in Economics.
Dermot O’Leary – Chief Operating Officer
Dermot O’Leary is a 40-year veteran of the utility industry with expertise in all aspects of strategic planning, product development, manufacturing and supply chain processes, customer deployments, business development, contracting and international business. O’Leary currently serves as Chief Operating Officer of Tantalus. Before joining Tantalus in 2014, he served as executive vice president and general manager of the substation group of Serveron which is a VC-funded technology company that was acquired by BPL Global. Before his roles at Serveron and BPL Global, O’Leary spent the majority of his career in international executive leadership positions within Schlumberger. O’Leary served as VP and GM of Schlumberger RMS U.K. and Schlumberger Southern Africa. He also served as managing director of Schlumberger M&S South Africa and VP of sales of Schlumberger Industries North America. O’Leary was also the vice president and general manager of Cellnet, where he was responsible for the business unit P&L of the AMR group.
George Reznik – Chief Financial Officer
George Reznik has over 25 years of expertise in executive financial leadership and operations. Reznik has held key roles at rapidly growing public companies in the high technology industry. Reznik currently serves as chief financial officer of Tantalus. Before joining Tantalus in September 2020, Reznik served as chief financial officer and corporate secretary of Intrinsyc Technologies Corporation which is an IoT edge computing company. Reznik also served as the corporate finance valuation practice leader of Deloitte. At Deloitte, he was a member of the accounting practice in Canada and the United Kingdom for over 12 years. Reznik is a Chartered Professional Accountant – Chartered Accountant, a Chartered Business Valuator and a Certified Fraud Examiner. Reznik is also the 2017 recipient of the BC Public Company CFO of the Year award. Additionally, Reznik is the current chair of the BC Tech Association CFO Council.
Hugo Hodge – Executive Vice President and General Manager of the Caribbean Basin
Hugo Hodge serves as executive vice president and general manager of the Caribbean Basin for Tantalus. Hodge has dedicated his career to the success of utilities. Right before joining Tantalus, Hodge served as chief executive officer of the Virgin Islands Water & Power Authority. At Tantalus, Hodge leads strategic efforts to expand Tantalus’ presence in the Caribbean Basin through his extensive experience in distribution utility operations and his understanding of the unique business and operational issues in the region. Hodge has also held technical and leadership roles at Griffin Power (GA), Marietta Power (GA) and Georgia Power. Hodge is actively involved with the Caribbean Electric Utility Services Corporation (CARILEC), American Public Power Association (APPA) and the Electric Cities of Georgia (ECG) to support public power utilities across North America and the Caribbean.
Michael J. Julian – MBA and Chief Revenue Officer
Michael Julian served as the executive vice president of sales and commercial marketing at Tantalus for over a decade. Today, Julian is the chief revenue officer at Tantalus. As chief revenue officer, Julian is responsible for the evaluation and pursuit of strategic initiatives to accelerate revenue generation. Through the Tantalus sales organization, Julian works alongside the broader organization and executive leadership to identify paths to scale the company. Julian is a former United States Air Force officer. Julian has over 20 years of leadership, sales management and sales experience within the energy and communications industries. Julian has held roles at GE, Ericsson, Tekelec and Catapult Communications. Julian is a graduate of General Electric’s Technical Sales Program. He earned an MBA from the W.P. Carey School of Business at Arizona State University and holds a B.S. in Electrical Engineering from Villanova University.
Michael Grandis – General Counsel
Michael Grandis currently serves as the general counsel of Tantalus and is responsible for all legal matters across the company and its affiliates. He oversees contracting, corporate governance, partnership, intellectual property, employment, compliance and other transactional matters. Before joining Tantalus, Grandis was a corporate partner at Loeb & Loeb LLP in the New York law office. During this time, Grandis also acted as outside general counsel to Tantalus for several years. Grandis has nearly two decades of experience practicing law at New York law firms. Grandis has represented clients on a broad range of corporate, securities and other transactional engagements.
Additionally, Grandis serves as the chairman of the board of trustees of a charter school network in New York and also sits on the board of directors of a large youth sports organization. He also lectures on venture finance and other entrepreneurial topics at Cornell Tech which is a joint academic venture between Cornell University and the Technion-Israel Institute of Technology in New York. Grandis received his B.S. from Georgetown University and his J.D. from Columbia University School of Law where he was a member of the Columbia Business Law Review.
Laura Formusa – Chair and Director
Laura Formusa has more than 30 years of experience in the utility industry. Formusa is currently a director of Tantalus. She served as president and chief executive officer at Hydro One Inc. from 2007 until her retirement at the end of 2012. She joined Hydro One Inc. in 1980 and took on roles of increasing responsibility, including vice-president, general counsel and secretary. Formusa serves on the boards of Equitable Life Insurance Company of Canada, 407 International Inc. and ENMAX where she is chair of the Safety and Human Resources Committee. She has also served on the Boards of DHX Media Ltd., the Canadian Electricity Association, ICES and York University. Formusa has a Bachelor of Laws from York University’s Osgoode Hall Law School and holds the Institute of Corporate Directors Designation.
Dr. Francis J. Harvey – Director
Dr. Francis Harvey is currently a director of Tantalus. He served as the 19th Secretary of the United States Army from November 2004 to March 2007. As the Secretary, Harvey was responsible for the Department of the Army’s annual budget and supplemental budget of over $200 billion. He led a workforce of over one million Active Duty, Army National Guard, Army Reserve Soldiers and Department of the Army civilian employees. Before becoming the Secretary, Harvey served on six corporate boards, including three portfolio companies of the Carlyle Group. He served as the vice-chairman for two of those companies.
Currently, Harvey is on the corporate or advisory boards of six companies and private equity firms in the energy, defense and information technology sectors, including Tantalus. The majority of Harvey’s business career was spent with the Westinghouse Electric Corporation. Harvey joined Westinghouse Electric in 1969 as a senior engineer and in 1997 he became the chief operating officer. While at Westinghouse Electric, he held several senior leadership positions, including vice president of science and technology, president of the government and environmental services company and president of the defense and electronics systems group. Harvey holds a BS from the University of Notre Dame and a Ph.D. in Metallurgy and Material Science from the University of Pennsylvania.
Thomas Liston – Director
Thomas Liston is a technology investor and advisor. He currently serves on several boards of directors for public and private technology companies. He has a strong track record of shareholder value creation for the companies he has worked at. Before his current roles, he was the chief investment officer of a leading technology-focused venture capital firm that provided growth capital to late-stage private companies. Liston began his career as a research analyst covering public Software and IT Services companies. In 2003, he joined Versant Partners in the same role and was quickly promoted to director of research while maintaining his coverage of technology companies.
As a technology analyst, Liston has been consistently ranked among the top technology analysts in several surveys, including StarMine, Brendan Wood, Greenwich Associates and Reuters. Liston is a CFA charter holder. He has a Bachelor of Business Administration degree in Finance from the University of New Brunswick and a Master of Arts in Economics and Finance from Queen’s University. He was a recipient of the UNB Faculty of Management’s Certificate of Achievement in 2017 and was recognized with the Proudly UNB Alumni Award of Distinction in 2020.
John McEwen – Director
John McEwen is a co-founder of Discovery Capital and a director of the BC Discovery Fund (VCC) Inc. He has worked with nearly 200 technology companies. McEwen also serves on several investee company boards. He spearheaded corporate finance initiatives for companies such as Sierra Wireless Inc. and Circon Systems Corp. that accelerated their development by attracting key corporate and additional venture capital backing. Before co-founding Discovery Capital, he worked with IBM Canada Ltd. He holds a Bachelor of Commerce from U.B.C.
